Chicago-based Green Thumb (GTBIF – Get Report) owns the Rise and Essence brands of retail cannabis outlets, with more than 50 retail stores under the Rise name and additional outlets through third-party marketers. Green Thumb’s calendar Q2 earnings release showed $44.7 million in revenues, a 60% sequential gain and a 228% year-over-year gain. Organic consumer product growth and increased store traffic powered the revenue gains. Along with fast-growing revenue, the company also boasts a strong cash position, with $83 million in liabilities more than balanced by $117 million cash on hand. CEO Ben Kolver stated of the company’s forward prospects, “Continued execution of key priorities such as… accelerated store openings, and expanded distribution of our brand portfolio, sets us up well for the future.”
With operations in 12 US states, including its retail locations and 13 manufacturing facilities, Green Thumb is well positioned to take advantage of the expansion prospects in the US cannabis markets.
Starting coverage of Green Thumb for Cowen in mid-September, 5-star analyst Vivien Azer specifically cites the company’s high growth potential. She writes, “We believe the company’s focused operating model that favors geographic depth, and a balanced revenue approach between wholesale and retail, gives GTI the most revenue and margin potential among our MSO coverage. GTI is our favorite name among the MSOs.” Azer’s $18.50 price target suggests an upside to this stock of 122%. Ms. Azer adds that Green Thumb is a “compelling buy,” describing it as, “…currently trading at 4.2x FY20 revenue, which is a 22% discount to their MSO peers.” (To watch Azer’s track record, click here)
The company’s low share price and high upside are key benefits for new investors looking to get in on that expansion. GTBIF sells for just $8.30 cents per share, and the average price target, $19.75, indicates room for 138% growth. Green Thumb’s Strong Buy analyst consensus rating is based on a unanimous 7 buys assigned to the stock in the last three months. Source Smarter Analysts